Central Bank of Russia
June 10, 2022
The Central Bank of Russia, unlike most other monetary authorities around the world, is marching to a different drum, and the irony is that Russia’s ruthless destruction of Ukraine — a major producer of both energy and food — is a major reason for the rise of world inflation. Two rate hikes by Russian officials last February lifted the policy rate from 8.5% to 20%. But thanks to that quick action and the imposition of capital controls, the Russian ruble at 57 per dollar currently has appreciated past its pre-invasion level, and this has enabled the central bank’s interest rate to be lowered by leaps and bounds. Three 300-basis point cuts between April 18 and May 26 were followed today by an announced larger-than-expected 150-basis point reduction to 9.5%. A released statement after today’s action asserts that inflation is dropping faster than expected two months ago and that economic activity has not declined as much as feared. Russia’s next scheduled monetary policy review will be on July 22.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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